Gold struggles to cheer US dollar weakness

Gold is flashing red in Asia despite the weakness in the US dollar, its biggest nemesis. 

The yellow metal is currently trading at $1,606 per ounce, representing a 0.5% decline on the day. Meanwhile, the dollar index, which tracks the value of the greenback against majors, is hovering near 100.65 - down 0.27% on the day. 

Markets are offering US dollars, possibly on expectations of the US fiscal stimulus bill. 

The US Senate ran into some last-minute snag Wednesday afternoon and struggled to pass a $2.2 trillion relief package designed to support households and businesses, which are facing a crisis due to the coronavirus outbreak. 

However, as per the latest reports, the Senate is back on track to pass the rescue package this Wednesday evening (Thursday morning in Asia). 

The fiscal stimulus bill has been in the making for at least four days now and may have been priced in by markets. The Dow Jones Industrial Average rose more 1,000 points on Tuesday and nearly 500 points on Wednesday. 

As a result, the passage of the stimulus bill in the Senate could be followed by "sell the fact" trade in the equity markets, more so, as the coronavirus outbreak is showing no signs of slowing down in the US, Japan and in European countries. In that case, gold may find haven bids. 

At press time, the futures on the S&P 500 are reporting a 0.6% drop. 

Technical levels